Allowed

T Jayakumar v. Motilal Oswal Home Finance Ltd.

DRT8 Apr 2026SA/433/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application filed under Section 17(1) of the SARFAESI Act, setting aside an order passed by the Chief Judicial Magistrate under Section 14. The tribunal found that the bank proceeded without following mandatory procedures, failed to issue proper notices, and submitted an incomplete application before the magistrate, while the respondent bank did not appear.

What did the court decide?

The SARFAESI Application was allowed as prayed; the impugned order of the Chief Judicial Magistrate under Section 14 of the SARFAESI Act was set aside; expenditures incurred are not to be included in

T Jayakumar versus Motilal Oswal Home Finance Ltd. — Cheque Dishonour | DRT (2026)

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SA No. 433/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 08^th DAY OF APRIL, 2026

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 433/2023

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Mr. T. Jayakumar, S/o Mr. Thangaiah, No. 94, Anaikaraipatti, Suppalapuram Post, Andipatti, Theni – 625 536. --- Applicant

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-Vs-

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The Authorised Officer,

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Motilal Oswal Home Finance Ltd., Poonamalle.

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Chennai.

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The Chief Judicial Magistrate,

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Theni,

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Theni District. --- Defendants

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Appearance of Advocates:

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Mr. R. Ravichandran ---- Counsel for the Applicant 1^st Defendant is none other than the Ld. CJM, Trichy 2^nd Defendant present and not filed Vakalat, etc.,

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This SARFAESI Application was heard in the presence of Counsel for the Applicant and fixed for passing final order before me and upon hearing the arguments of the Counsels and having stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

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1 . This Application has been filed u/s.17(1) of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside all the proceedings initiated under SARFAESI Act. (i.e) The Impugned Order in Cr. M.P. No. 7434/2023 dated 21.08.2023 passed by the 1^st Defendant U/s. 14 of the SARFAESI Act, 2002.

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Page 1 of 7

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SA No. 433/2023

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2 . The brief averments of the Application filed by the Applicant are as follows:-

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a) The applicant has approached the 1^st defendant and sought home loan in a sum of Rs.8,45,498/- on 11.06.2017. Considering the request made by the applicant, the 1^st defendant has sanctioned housing term loan amount to a limit of Rs. 8,45,498/-. The applicant has executed necessary security documents in favour of the defendant. Apart from the loan documents the 1^st defendant obtained signatures from the applicant who is kept in dark for what purpose they have been used for. The applicant had mortgaged his dwelling house and created equitable mortgage over the property described in the schedule hereunder. It is submitted that the applicant had executed MODT dated 04.07.2017 in favour of the 1^st defendant bank.

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b) The applicant further submitted that he has paid the loan dues as per the terms and condition of the loan agreements till the intervention of COVID-19 pandemic. Due to the lock down declared by the Central Government, the applicant could not make fund. In the result, the applicant could not repay the loan dues as agreed to, but the applicant not allowed his account become a Non Performing Assets. But the 1^st defendant bank declared the loan account as NPA without following the Reserve Bank of India guideline. Further, 2^nd defendant to take physical possession of the applicant's dwelling house with the help of revenue and police officials. The applicant went to 2^nd defendant's office and made inquiry about the Sec.14 application filed by the 1^st defendant. The 2^nd defendant office affirmed that the 1^st defendant bank had filed application under Sec. 14 of the SARFAESI Act and obtained order dated 21.08.2023. Further, the applicant requested the 2^nd defendant officials to give a copy of impugned order, but they refused to give the copy and advised the applicant to get the copy through court website. Accordingly, the applicant had downloaded the copy from the 2^nd defendant's website and held this application before this Hon'ble Tribunal.

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c) The applicant further submitted that in from the order copy it transpires that already the bank issued demand notice dated 29.07.2019 U/s.13(2) of the SARFAES! Act giving 60 days time to repay the loan amount. Further the bank has issued a possession notice dated 10.12.2019 U/s.13(4) of the SARFAESI Act and took symbolic possession of the secured assets and also mentioned that the possession notice was already published in two newspapers on 17.12.2019. The applicant was not served with any demand or possession notice as mentioned in the impugned order.

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Page 2 of 7

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SA No. 433/2023

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d) The applicant further submitted that the Authorized officer gave an assurance to the applicant that the bank will not take any coercive action against the secured assets. It is pertinent to note that the due to covid-19 the RBI directed the entire banking sector to give restructure package to housing loan. It is pertinent to note that instead of restructuring the said loan, the 1^st defendant bank has declared the applicants loan account as NPA against the RBI norms and issued demand notice under the SARFAESI Act.

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e) The applicant further submitted that the said possession notice was not affixed in the conspicuous part of the mortgaged property and the same was not published in English newspaper within 7 days from the date of possession notice. It is submitted that the order itself shows that there is no affixture by the bank on the conspicuous part of the mortgage property which is against Rule 8(1) of the security Interest Enforcement rules. The applicant was not put on any notice U/s.13(2) of SARFAESI Act. As per act without any statutory notice U/s.13(2), the 1^st defendant bank cannot issue any possession notice U/s.13(4) of the SARFAESI Act. Hence, this Hon'ble Tribunal ought to set aside the order passed by the 2^nd defendant.

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f) The applicant submitted that pursuant to the order dated 21.08.2023 passed by the Hon'ble CJM, Theni in Criminal Miscellaneous petitioner No.7434/2023 under Sec.14 of the SARFAESI Act, the advocate commissioner was duly appointed by the 2nd defendant to take physical possession of the applicant's dwelling house where he is residing along with his family members.

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Hence this SARFAESI application is filed by the applicant before this Hon'ble Tribunal among the following:

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GROUNDS

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The impugned order dated 21.08.2023 passed by the 2^nd defendant under Sec. 14 of the SARFAESI Act and the entire measures initiated under the SARFAESI act are arbitrary in nature, illegal, contrary to law, want for weight of evidence etc and thus liable to be set aside.

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It is submitted that the 1^st defendant failed to follow the procedures contemplated in the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and security interest rules.

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It is submitted the 1^st defendant failed to file affidavit before the 2nd defendant.

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Page 3 of 7

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SA No. 433/2023

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It is submitted that the bank suppressing the entire facts before the 1^st defendant and obtained the impugned action of the 1^st defendant in obtaining the order dated 21.08.2023 under Sec. 14 of the SARFAESI Act, seeking to proceed against the dwelling house claimed to be the secured assets is contrary to law, without jurisdiction, arbitrary and unreasonable, violative of the principles of natural justice, is also colorable exercise of power and the measures had been taken in unpredictable manners.

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Wrongful Classification of NPA: The defendant wrongly classified the applicants account as Non-Performing Assets (NPA). The 1^st defendant has not followed the Reserve Bank of India guidelines while classification the account as NPA. Further the defendant ought to seen that the classification of the applicant loan account as NPA during the COVID-19 Lock Down is illegal, especially when the applicant paid the loan dues till the intervention of Covid-19 pandemic.

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Non Compliance of See 13(2): The 1^st defendant bank has failed to issue demand notice to the other borrower

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Non Compliance of Sec 13(4): The 1^st defendant bank has failed to affix the possession notice on the conspicuous part of mortgaged property and failed to publish the possession notice in two leading newspapers.

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The Sec.14 application is liable to be set aside as admittedly the 1^st defendant has proceeded further without following the formalities under the SARFAESI Act.

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Non Compliance of Section 20 of the SARFAESI Act: The applicant submits that the 1^st defendant has failed to register the alleged transaction registered with the Central Registry as per the Act & rules.

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It is submitted that the Authorized Officer is a Quasi Judicial Authority under the Act and hence the Authorized Officer name must be mentioned in the sale notice.

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Statement of account not furnished: The applicant further alleges that the 1^st defendant bank has not furnished the complete statement of account as the details of certain credits to the account are not reflected. Hence the 1^st defendant bank has to be directed to furnish complete statement of accounts.

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Page 4 of 7

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SA No. 433/2023

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It is submitted that at the time of loan sanction, the 1^st defendant bank has obtained various signatures from the applicant blank papers and prefilled forms and he was kept in dark for which it could be used. Thus in the interest of natural justice, the bank is called for the entire documents available in its custody which it alleges to rely upon confirming the creation of the mortgage.

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The interest levied by the 1^st defendant bank is against the principles laid down in Reserve Bank of India Guideline rules.

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The Applicant reserved his right to file additional grounds as and when necessary.

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SCHEDULE OF THE PROPERTY

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In Theni District, Periyakulam Registration District, Andipatti SubRegistration District, Andipatti Taluk, Thimmarasanayakanur Village, T. Anaikaraipatti, bearing Natham Manaivari Patta No.989. Old Natham Survey No.195/1 as per New Natham Survey No.2457/10 to an extent of 768.75 square feet area constituting New Natham Survey No.2457/10 the house and building thereon situated within the following boundaries:

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North : Cement Road

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East : Common Pathway South : House belongs to Kannan West : House belongs to Chenuary

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The measurements are on East-West 20½ feet on the Northern side, 20% feet on the Southern side; North-South 37½ feet on the Eastern side, 37% feet on the Western side, totaling 768.75 square feet of house site with RCC building and all appurtenance.

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The Applicants have submitted the following List of documents in support of his claim in the SA, which are as follows:

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S. No.	Date	Description
1.	31.01.2023	Payment Receipt
2.	27.02.2023	Payment Receipt
3.	29.03.2023	Payment Receipt
4.	21.08.2023	Order passed by 2^ndDefendant under Sec 14 of the SARFAESI Act.

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Page 5 of 7

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SA No. 433/2023

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3 . On the other hand, the Defendant Bank did not appear before this Tribunal inspite of service of notices, hence this case was heard Ex-Parte.

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4. ON THE BASIS OF THE ABOVE PLEADINGS, THE POINT WHICH ARISES FOR CONSIDERATION IS :-

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WHETHER THE APPLICANT IS ENTITLED TO GET THE RELIEFS AS PRAYED FOR ?

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5 . Having heard the parties and after going through the entire documents available on records, and also after considering the arguments by the Counsels, I find that it is admitted fact that the Applicant has taken loan from the Defendant Bank but the Applicant failed to repay the loan amount the loan account has been classified as NPA. The Applicant in his averment stated that the Bank has failed to issue Demand Notice u/s. 13(2) of the SARFAESI Act on 29.07.2019 and also to issue Possession Notice u/s 13 (4) of the SARFAESI Act on 10.12.2019. Further, the Applicant stated that the Bank has failed to affix the Possession Notice on the conspicuous part of the property.

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Further, the applicant contended that the Bank has failed to follow the procedure contemplated in the SARFAESI Act. The Chief Judicial Magistrate, Theni has passed order in Cr. M.P. No. 7434/2023 on 21.08.2023 under Sec 14 of SARFAESI Act and he had failed to verify as to whether the provision of the Act has been followed by defendant bank or not. The CJM, Theni failed to see that the applicant does not contain the necessary particulars, annexure and affidavit which is mandatory. Hence, the order of CJM, Theni ought to have rejected the application.

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On the other hand the defendant bank did not appear inspite of service of notice as such there is neither any rebutted by the Defendant Bank nor he has filed any document to disprove the allegation of the applicant. Hence, this case is liable to be allowed.

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Page 6 of 7

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SA No. 433/2023

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I also find that during the pendency of the case, this Tribunal has granted a conditional stay order dated 08.09.23 for a sum of Rs. 10,08,953/- (Rupees Ten Lakhs Eight Thousands Nine Hundreds and Fifty Three only) to be paid in two instalments each Rs. 1,52,000/- by the Applicant, the Applicant has also complied with the conditional order and proved his bona-fide.

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In the result,

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(a) SA No. 433/2023 is allowed as prayed for.

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(b) The Impugned Order passed by the Ld. CJM, Theni in Cr. M.P. No. 7434/2023 dated 21.08.2023 is also hereby set aside.

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(c) All the expenditures incurred in issuance of Impugned Order passed by the Ld. CJM, Theni in Cr. M.P. No. 7434/2023 dated 21.08.2023 and further all the expenditures incurred in respect of Possession Notice dated 10.12.2019 etc. shall not be included in the loan account of the Applicant.

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(d) The 2^nd Defendant Bank is at liberty to initiate fresh action against the Applicant as per the SARFAESI Acts & Rules.

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Dictated to Typist (SKP), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 08^th April, 2026.

Sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Uploaded on 18.04.2026

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T Jayakumar v. Motilal Oswal Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

T Jayakumar v. Motilal Oswal Home Finance Ltd.

Case brief

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